Monday, 7 October 2013
Wednesday, 28 August 2013
multi state cooperative society
Definition
of a multi state cooperative society: -
A multistate cooperative society is registered from the centre i.e. Delhi
Types of
multi state cooperative societies and requirements: -
A multi
state cooperative society is of various types- Credit, Housing, Agriculture,
Transport, Hospital, Sugar, Stores, Fishery, Handloom, Labor, Consumer and
Multi Purpose Co-operative Society. The basic formalities for forming this
society are to arrange at least 50 members from two states each. There can be
more than 50 members as well but each additional state requires a minimum of 50
members from that state. These first fifty members are ordinary members who
have voting right and to whom shares are allotted. The second category of
members are nominal members to whom shares are not allotted, who do not have
voting right and who never participate in any of the general body meetings.
Role of
Governing Body Members of Multi state:-
As far the
interim management committee list is concerned who are responsible for the
management and handling of the society, the society should minimum 7 members and this list can go unto
21 members. After the 97th Constitutional Amendment Act 2011 from February
2013, it is mandatory to keep 2 ladies and 1 extra member who belong to
Scheduled Caste or to Scheduled Tribe in the main governing body list. Till
today, there are 900-950 Multi State Cooperative Societies out of which maximum
are credit. The governing body members take part in annual general body
meetings, special general body meetings, resolutions, notice, quorums etc.
Just for
example in a credit cooperative society, if the society wants to make any
scheme like gold loan, automobile loan, fixed deposit loan, double deposit
plan, triple deposit plan or any special scheme, the society has to give a
prior 15 days notice to all its members by speed post, newspaper publication
etc. After 15 days, the general body meeting is conducted. The meeting can only
happen if the quorum is one-fifth of the total members present and voting
during the resolution. The signatures of the governing body members as well as
ordinary members present and voting are taken in the minute’s book and
maintained for future records. The special general body meeting can be
conducted by giving a notice of at least seven days. A society should conduct
at least 4 general body meetings in every financial year. Moreover, in every
financial year, the society should hire a chartered accountant in a general
body meeting by passing a resolution. This CA looks after the accounts of the
society and files the balance sheets and income tax return. The societies
except Credit, Housing and Multi Purpose can collect money from its members on
the basis of shared allotment and advance. They can give dividends to their
members on shares and commissions on advance. Moreover as per the rules of MSCS
Act 2002, a person already being a member of a society cannot be a member of a
multi state cooperative society of the same type.
Management
of a Multi State
The election
of the cooperative society is held first time within six months from the date
of its registration. Thereafter the elections are conducted at every five
years. A President can remain as a President for two consecutive times but the
third time, the President has to change. No part of the funds, other than net
profits of a multi state cooperative society shall be divided by way of bonus
or dividend or otherwise distributed among its members. The net profits of the
multi state society shall be calculated by deducting from the gross profit for
the year, all interest accrued, and accruing in relation to amounts which are
overdue, establishment charges, interest payable on loans and deposits, audit
fees, working expenses including repairs, rent, taxes and depreciation, bonus
payable to employees under the law relating to payment of bonus for the time
being in force, and equalization fund for such bonus, provision for payment of
income-tax and making approved donations under the Income Tax Act 1961,
development rebate, provision for development fund, bad debt fund, price
fluctuation fund, dividend equalization fund, share capital redemption fund,
investment fluctuation fund, share capital redemption fund, investment
fluctuation fund, provision for retirement benefits to employees and after
providing for or writing off bad debts and losses not adjusted against any fund
created out of profit. The condition is that such society may add to the net
profits for the year interest accrued in the preceding years, but recovered
during the year. In case of multi state cooperative societies which do not have
share capital, the surplus of income over expenditure shall not be treated as
net profits and such surplus shall be dealt with in accordance with the
bye-laws. A multi state cooperative society shall, out of its net profits in
any year transfer an amount not less than twenty-five percent to the reserve
fund, credit one percent to cooperative education fund maintained by the
National Co-operative Union of India Limited, New Delhi or transfer an amount
not less than ten percent to a reserve fund for meeting unforeseen losses. No
multi state cooperative society shall make a contribution either in money or in
kind, whether directly or indirectly, to an institution which has an object of
furtherance of the interest of a political party. There is a restriction on
loan as well. No cooperative society other than cooperative bank shall make a
loan to a member on the security of this share or on the security of a
non-member. But the society can make a loan to a depositor on the security of
this deposit. The multi state society my receive deposits, raise loans and
receive grants from external sources to such extent and under such conditions
as may be mentioned in the memorandum provided that the total amount of
deposits and loans received during any financial year shall not exceed ten
times of the sum of subscribed share capital and accumulated reserves. The net
accumulated reserves are calculated by subtracting accumulated losses from
accumulated reserves.
Time Taken
for registration: -
Generally,
the maximum time period for a multi state cooperative society registration is 4
to 5 months. In case, the application receives an objection, in that case, the
application can be filed again and in certain circumstances, the society
registration can be done earlier also on the basis of earlier rejections or on
political pressures.
Besides
registration, the amendment proposal is also filed in the Ministry of
Agriculture. It takes normally three to four months. It is very rare that
amendment proposal is rejected. We can file amendment if we want to increase
our area of operation i.e. number of states or increase our authorized share
capital or change our name or change our office address.
The
documents filed along with amendment proposal are bank statement, audited
balance sheets showing net profit and turnover. The ministry demands
justification and proper reasons why a society proposal should be amended.
Benefits of
a multi state cooperative society: -
Overall, a
multi state cooperative society is a useful alternative for all real estate
companies,
public limited, private limited and chit fund companies where almost saturation
has reached. This Centre Act has been passed by the parliament in the year
2002. The mission of the multi state society is to facilitate the voluntary formation
and democratic functioning of cooperatives as peoples institutions based on
self help and mutual aid and enable them to promote their economic and social
betterment and to provide functional autonomy.
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